Solana Price Returns to Long-Term Support After 25% Fall – SOL Trend Intact Despite Decline
Will Solana Break Down From Long-Term Support? | Credit: Hameem Sarwar
Key Takeaways
- The Solana price decreased by 25% since its yearly high of $210 on March 18.
- SOL has traded inside a symmetrical triangle pattern for nearly 100 days.
- Will SOL break down from the $153 area and where will it fall to if it does?
The Solana price has been one of the best performers since the start of 2023, increasing by a remarkable 1,800% until March 2024. However, the Solana price has fallen since, declining by 25%.
While the decline has been gradual, SOL risks breaking down from a key horizontal support level. Will it do so, and where will the decrease lead to if this happens?
Solana Price Falls – Returns to Support
The SOL price has fallen since reaching a yearly high of $210 in March. SOL reached a low of $118 in April before bouncing, validating a long-term ascending support trend line.
However, the price created a lower high in May and has fallen since, returning to the support trend line once more. So far, the trend line has existed for 238 days, so its breakdown could mean the upward trend is over.
An interesting development is the bearish divergence in the weekly time frame RSI (green) which led to the entire decrease. The divergence was followed by a bearish cross in the MACD (red icon).
The previous time this happened was in 2021, preceding a nearly two-year correction. The only difference between the two movements is that the SOL price created another high after the divergence in 2021, while it did not do so in 2024.
The daily time frame SOL price chart reiterates the importance of the current support level, since it shows a horizontal support at $153, coinciding with the previously outlined long-term ascending support trend line.
While the SOL price broke out from this area in May, it has returned to it after a rejection from a short-term descending resistance trend line (red icon).
The daily RSI and MACD are gradually turning bearish. They are trending downward and falling below 50 and 0, respectively (red circles).
If the SOL price breaks down, the next support will be at $135. An ascending support trend line creates this support level and a symmetrical triangle pattern when combined with the short-term resistance.
Because of the mixed price action and indicator readings, the wave count can help determine the outline for the future movement.
SOL Price Prediction: Wave Count Forecasts More Consolidation
The daily time frame wave count suggests SOL is in wave four of a five-wave upward movement. The extended wave three ended with the yearly high, marking the start of the correction. The sub-wave count is in yellow.
There are two possibilities for the shape of the correction. The most likely one implies SOL is trading inside a fourth wave triangle. If so, it is completing sub-wave C, and will eventually break out from this triangle, starting wave five.
The more bearish scenario suggests that SOL is also in wave C but is in an A-B-C corrective structure instead (black). In this count, the price will fall below its April lows of (red) $117 before beginning an upward movement.
Since both counts predict SOL will break down from the $155 horizontal support area, this is the most likely future outlook. Then, the reaction to the ascending support trend line will determine if the triangle or A-B-C counts will transpire.
Solana to Continue Consolidating Before Breakout
The price of Solana started its correction after the yearly high on March 18. The wave count and price action imply the correction will continue for at least aonther downward movement. A breakout from the triangle will confirm the correction has ended and can lead to a new all-time high price.
